LIE OF THE DAY FROM ACT

Corporate Responsibility – Pennsylvania

Rhetoric: “You see, one of the things that we did, we passed a—part of this corporate reform bill, one of the things we passed which made a lot of sense is that if the boss gets to sell, everybody else does. What’s good for the head person is good for the people on the shop floor.” [Source: President Bush’s remarks at a Labor Day Picnic in Pittsburgh, 9/2/02]

Reality: When Bush was on board of Harken Energy, he dumped stock just before significant losses, saving him $600,000; the “people on the shop floor” certainly did not have access to the information he saw. On June 22, 1990, Bush sold all of his Harken Energy stock, 212,140 shares, at $4 per share. Two months later, Harken reported unexpectedly high operating losses for the quarter to its stockholders, and the stock’s value fell 75 percent. Bush claims he was unaware of these impending losses when he sold his shares, yet as a member of the board’s audit committee, he had a meeting with Harken’s auditors and accountants (Arthur Andersen) on June 11, just before he dumped his shares. The SEC would later launch an investigation into this sale which saved Bush $600,000. [Source: Washington Post, 7/14/02; Center for Public Integrity]
Posted by Brendan Gilfillan, Research Intern Wednesday, September 01, 2004